§41‑11.1. Sale, lease or mortgage of property held by a"class," where membership may be increased by persons not in esse.
(a) Wherever there is agift, devise, bequest, transfer or conveyance of a vested estate or interest inreal or personal property, or both, to persons described as a class, and at theeffective date thereof, one or more members of the class are in esse, and thereis a possibility in law that the membership of the class may later be increasedby one or more members not then in esse, a special proceeding may be institutedin the superior court for the sale, lease or mortgage of such real or personalproperty, or both, as provided in this section.
(b) All petitions filedunder this section wherein an order is sought for the sale, lease or mortgageof real property, or of both real and personal property, shall be filed in theoffice of the clerk of the superior court of the county in which all or anypart of the real property is situated. If the order sought is for sale, leaseor mortgage of personal property, the petition may be filed in the office ofthe clerk of the superior court of the county in which any or all of suchpersonal estate is situated.
(c) All members of theclass in esse shall be parties to the proceeding, and where any of such membersare under legal disability, their duly appointed general guardians or theirguardians ad litem shall be made parties. The clerk of the superior court shallappoint a guardian ad litem to represent the interests of the possible membersof the class not in esse, and such guardian ad litem shall be a party to theproceeding.
(d) Upon a finding bythe clerk of the superior court that the interests of all members of the class,both those in esse and those not in esse, would be materially promoted by asale, lease or mortgage of any such property, he shall enter an order that thesale, lease or mortgage be made, and shall appoint a trustee to make suchsale, lease or mortgage, in such manner and on such terms as the clerk may findto be most advantageous to the interests of the members of the class, boththose in esse and those not in esse; but no sale, lease or mortgage shall bemade, or shall be valid, until approved and confirmed by the resident judge ofthe district, or the judge holding the courts of the district. As a conditionprecedent to receiving the proceeds of the sale, lease or mortgage, thetrustee shall be bonded in the same manner as a guardian for minors.
(e) In the event of asale of any such property, the proceeds of sale shall be owned in the identicalmanner as the property was owned immediately prior to the sale; provided,
(1) The trusteeappointed by the clerk as provided above may hold, manage, invest and reinvestsaid proceeds for the benefit of all members of the class, both those in esseand those not in esse, until the occurrence of the event which will finallydetermine the identity of all members of the class; all such investments andreinvestments shall be made in accordance with the laws of North Carolinarelating to the investment of funds held by guardians or minors; and all theprovisions of G.S. 36‑4, relating to the reduction in bonds of guardiansor trustees upon investment in certain registered securities and the deposit ofthe securities with the clerk of the superior court, shall be applicable to thetrustee appointed hereunder;
(2) The clerk byappropriate order, in lieu of holding, managing, investing and reinvesting theproceeds of sale, may pay or authorize the trustee to pay the entire amount ofsuch proceeds to the living members of the class as they may be thenconstituted or to their duly appointed guardians, or to pay the ratable portionor portions of such proceeds to one or more of such living members or to theirguardians; provided that, where the class would be closed by the death of themother or mothers of the members of the class, said mother or mothers areliving and have attained the age of 55, and upon the further condition thatthere be first filed with the clerk a bond conditioned upon the payment of thelawful share of any member of the class not then in esse, but who maythereafter come into being or otherwise become a member of the class, to suchmember or his guardian whenever he becomes a living member of the class. Suchbond shall be payable to the State to the use of the additional members of theclass and shall be either a cash bond or a premium bond executed by a suretycompany authorized to transact business in North Carolina. The penalty of suchbond shall not be less than one and one fourth the amount of the proceeds ofsale. Any bond filed hereunder shall be acknowledged before and approved by theclerk of the superior court.
(f) In the event theproceeds of sale shall be paid over to a trustee and invested by him asauthorized above, the entire income actually received by the trustee from suchinvestment shall be paid by said trustee periodically, and not less often thanannually, in equal shares to the living members of the class as they shall beconstituted at the time of each such payment, or to the duly appointedguardians of any such living members under legal disability.
(g) In the event thecourt orders a lease of the property, the proceeds from the lease shall befirst used to defray the expenses, if any, of the upkeep and maintenance ofthe property, and the discharge of taxes, liens, charges and encumbrancesthereon, and any remaining proceeds shall be paid over by the trustee in theirentirety, not less often than annually, in equal shares to the living membersof the class as they shall be constituted at the time of each such payment orto the duly appointed guardians of any such members under legal disability.
(h) Payments of incometo the living members of the class as aforesaid shall constitute a full andfinal acquittance and disposition of the income so paid, it being the intent ofthis section that only the living members of the class (as they may beconstituted at the time of each respective income payment) shall be entitled tothe income which is the subject of the respective payment, and that possiblemembers of the class not in esse shall not share in, or become entitled to thebenefit of any income payment made prior to the time that such members are bornand become living members of the class.
(i) In the event thatthere has been a sale of any of the property, and the proceeds of sale arebeing held, managed, invested and reinvested by a trustee as provided above,any member of the class who is of legal age and who is not otherwise underlegal disability may sell, assign and transfer his entire right, title andinterest (both as to principal and income) in the funds or investments so heldby the trustee. Upon receiving written notice of such sale, assignment ortransfer, the trustee shall recognize the purchaser, assignee and transferee asthe lawful successor in all respects whatsoever to the right, title andinterest (both as to principal and income) of the seller, assignor andtransferor; but no such sale, transfer or assignment shall divest the trusteeof his legal title in, or possession of, said funds or investments or (exceptas provided above) affect his administration of the trusts for which he wasappointed.
(j) The court shallorder a mortgage of the property only for one or more of the followingpurposes:
(1) To provide funds forthe costs and expenses of court incurred in carrying out any of the provisionsof this section;
(2) To provide funds forthe necessary upkeep and maintenance of the property;
(3) To make reasonableimprovements to the property;
(4) To pay off taxes,other existing liens, charges and encumbrances on the property.
(k) The mortgagee shallnot be held responsible for the application of the funds secured or derivedfrom the mortgage. As used in this section, references to mortgages shall alsoapply to deeds of trust executed for loan security purposes.
(l) Every trusteeappointed pursuant to the provisions of this section shall file with the clerkof the superior court an inventory and annual accounts in the same manner as isnow provided by law with respect to guardians.
(m) The superior courtshall allow commissions to the trustee for his time and trouble in theeffectuation of a sale, lease or mortgage, and in the investment and managementof the proceeds, in the same manner and under the same rules and restrictionsas allowances are made to executors, administrators, and collectors.
(n) Provided, however,this section shall not be applicable where the instrument creating the gift,devise, bequest, transfer or conveyance specifically directs, by means of thecreation of a trust or otherwise, the manner in which the property shall beused or disposed of, or contains specific limitations, conditions orrestrictions as to the use, form, investment, leasing, mortgage, or otherdisposition of the property.
(o) And providedfurther, this section shall not alter or affect in any way laws or legalprinciples heretofore, now, or hereafter existing relating to the determinationof the nature, extent or vesting of estates or property interests, and of thepersons entitled thereto. But where, under the laws and legal principlesexisting without regard to this section, a gift, devise, bequest, transfer orconveyance has the legal effect of being made to all members of a class, someof whom are in esse and some of whom are in posse, the procedures authorizedhereby may be utilized for the purpose of promoting the best interests of allmembers of the class, and this section shall be liberally construed toeffectuate this intent. The remedies and procedures herein specified shall notbe exclusive, but shall be cumulative, in addition to, and without prejudiceto, all other remedies and procedures, if any, which now exist or hereafter mayexist either by virtue of statute, or by virtue of the inherent powers of anycourt of competent jurisdiction, or otherwise.
(p) The provisions ofthis section shall apply to gifts, devises, bequests, transfers, andconveyances made both before and after April 5, 1949. (1949,c. 811, s. 1; 1971, c. 641, s. 1; 1997‑456, s. 27.)
§41‑11.1. Sale, lease or mortgage of property held by a"class," where membership may be increased by persons not in esse.
(a) Wherever there is agift, devise, bequest, transfer or conveyance of a vested estate or interest inreal or personal property, or both, to persons described as a class, and at theeffective date thereof, one or more members of the class are in esse, and thereis a possibility in law that the membership of the class may later be increasedby one or more members not then in esse, a special proceeding may be institutedin the superior court for the sale, lease or mortgage of such real or personalproperty, or both, as provided in this section.
(b) All petitions filedunder this section wherein an order is sought for the sale, lease or mortgageof real property, or of both real and personal property, shall be filed in theoffice of the clerk of the superior court of the county in which all or anypart of the real property is situated. If the order sought is for sale, leaseor mortgage of personal property, the petition may be filed in the office ofthe clerk of the superior court of the county in which any or all of suchpersonal estate is situated.
(c) All members of theclass in esse shall be parties to the proceeding, and where any of such membersare under legal disability, their duly appointed general guardians or theirguardians ad litem shall be made parties. The clerk of the superior court shallappoint a guardian ad litem to represent the interests of the possible membersof the class not in esse, and such guardian ad litem shall be a party to theproceeding.
(d) Upon a finding bythe clerk of the superior court that the interests of all members of the class,both those in esse and those not in esse, would be materially promoted by asale, lease or mortgage of any such property, he shall enter an order that thesale, lease or mortgage be made, and shall appoint a trustee to make suchsale, lease or mortgage, in such manner and on such terms as the clerk may findto be most advantageous to the interests of the members of the class, boththose in esse and those not in esse; but no sale, lease or mortgage shall bemade, or shall be valid, until approved and confirmed by the resident judge ofthe district, or the judge holding the courts of the district. As a conditionprecedent to receiving the proceeds of the sale, lease or mortgage, thetrustee shall be bonded in the same manner as a guardian for minors.
(e) In the event of asale of any such property, the proceeds of sale shall be owned in the identicalmanner as the property was owned immediately prior to the sale; provided,
(1) The trusteeappointed by the clerk as provided above may hold, manage, invest and reinvestsaid proceeds for the benefit of all members of the class, both those in esseand those not in esse, until the occurrence of the event which will finallydetermine the identity of all members of the class; all such investments andreinvestments shall be made in accordance with the laws of North Carolinarelating to the investment of funds held by guardians or minors; and all theprovisions of G.S. 36‑4, relating to the reduction in bonds of guardiansor trustees upon investment in certain registered securities and the deposit ofthe securities with the clerk of the superior court, shall be applicable to thetrustee appointed hereunder;
(2) The clerk byappropriate order, in lieu of holding, managing, investing and reinvesting theproceeds of sale, may pay or authorize the trustee to pay the entire amount ofsuch proceeds to the living members of the class as they may be thenconstituted or to their duly appointed guardians, or to pay the ratable portionor portions of such proceeds to one or more of such living members or to theirguardians; provided that, where the class would be closed by the death of themother or mothers of the members of the class, said mother or mothers areliving and have attained the age of 55, and upon the further condition thatthere be first filed with the clerk a bond conditioned upon the payment of thelawful share of any member of the class not then in esse, but who maythereafter come into being or otherwise become a member of the class, to suchmember or his guardian whenever he becomes a living member of the class. Suchbond shall be payable to the State to the use of the additional members of theclass and shall be either a cash bond or a premium bond executed by a suretycompany authorized to transact business in North Carolina. The penalty of suchbond shall not be less than one and one fourth the amount of the proceeds ofsale. Any bond filed hereunder shall be acknowledged before and approved by theclerk of the superior court.
(f) In the event theproceeds of sale shall be paid over to a trustee and invested by him asauthorized above, the entire income actually received by the trustee from suchinvestment shall be paid by said trustee periodically, and not less often thanannually, in equal shares to the living members of the class as they shall beconstituted at the time of each such payment, or to the duly appointedguardians of any such living members under legal disability.
(g) In the event thecourt orders a lease of the property, the proceeds from the lease shall befirst used to defray the expenses, if any, of the upkeep and maintenance ofthe property, and the discharge of taxes, liens, charges and encumbrancesthereon, and any remaining proceeds shall be paid over by the trustee in theirentirety, not less often than annually, in equal shares to the living membersof the class as they shall be constituted at the time of each such payment orto the duly appointed guardians of any such members under legal disability.
(h) Payments of incometo the living members of the class as aforesaid shall constitute a full andfinal acquittance and disposition of the income so paid, it being the intent ofthis section that only the living members of the class (as they may beconstituted at the time of each respective income payment) shall be entitled tothe income which is the subject of the respective payment, and that possiblemembers of the class not in esse shall not share in, or become entitled to thebenefit of any income payment made prior to the time that such members are bornand become living members of the class.
(i) In the event thatthere has been a sale of any of the property, and the proceeds of sale arebeing held, managed, invested and reinvested by a trustee as provided above,any member of the class who is of legal age and who is not otherwise underlegal disability may sell, assign and transfer his entire right, title andinterest (both as to principal and income) in the funds or investments so heldby the trustee. Upon receiving written notice of such sale, assignment ortransfer, the trustee shall recognize the purchaser, assignee and transferee asthe lawful successor in all respects whatsoever to the right, title andinterest (both as to principal and income) of the seller, assignor andtransferor; but no such sale, transfer or assignment shall divest the trusteeof his legal title in, or possession of, said funds or investments or (exceptas provided above) affect his administration of the trusts for which he wasappointed.
(j) The court shallorder a mortgage of the property only for one or more of the followingpurposes:
(1) To provide funds forthe costs and expenses of court incurred in carrying out any of the provisionsof this section;
(2) To provide funds forthe necessary upkeep and maintenance of the property;
(3) To make reasonableimprovements to the property;
(4) To pay off taxes,other existing liens, charges and encumbrances on the property.
(k) The mortgagee shallnot be held responsible for the application of the funds secured or derivedfrom the mortgage. As used in this section, references to mortgages shall alsoapply to deeds of trust executed for loan security purposes.
(l) Every trusteeappointed pursuant to the provisions of this section shall file with the clerkof the superior court an inventory and annual accounts in the same manner as isnow provided by law with respect to guardians.
(m) The superior courtshall allow commissions to the trustee for his time and trouble in theeffectuation of a sale, lease or mortgage, and in the investment and managementof the proceeds, in the same manner and under the same rules and restrictionsas allowances are made to executors, administrators, and collectors.
(n) Provided, however,this section shall not be applicable where the instrument creating the gift,devise, bequest, transfer or conveyance specifically directs, by means of thecreation of a trust or otherwise, the manner in which the property shall beused or disposed of, or contains specific limitations, conditions orrestrictions as to the use, form, investment, leasing, mortgage, or otherdisposition of the property.
(o) And providedfurther, this section shall not alter or affect in any way laws or legalprinciples heretofore, now, or hereafter existing relating to the determinationof the nature, extent or vesting of estates or property interests, and of thepersons entitled thereto. But where, under the laws and legal principlesexisting without regard to this section, a gift, devise, bequest, transfer orconveyance has the legal effect of being made to all members of a class, someof whom are in esse and some of whom are in posse, the procedures authorizedhereby may be utilized for the purpose of promoting the best interests of allmembers of the class, and this section shall be liberally construed toeffectuate this intent. The remedies and procedures herein specified shall notbe exclusive, but shall be cumulative, in addition to, and without prejudiceto, all other remedies and procedures, if any, which now exist or hereafter mayexist either by virtue of statute, or by virtue of the inherent powers of anycourt of competent jurisdiction, or otherwise.
(p) The provisions ofthis section shall apply to gifts, devises, bequests, transfers, andconveyances made both before and after April 5, 1949. (1949,c. 811, s. 1; 1971, c. 641, s. 1; 1997‑456, s. 27.)
§41‑11.1. Sale, lease or mortgage of property held by a"class," where membership may be increased by persons not in esse.
(a) Wherever there is agift, devise, bequest, transfer or conveyance of a vested estate or interest inreal or personal property, or both, to persons described as a class, and at theeffective date thereof, one or more members of the class are in esse, and thereis a possibility in law that the membership of the class may later be increasedby one or more members not then in esse, a special proceeding may be institutedin the superior court for the sale, lease or mortgage of such real or personalproperty, or both, as provided in this section.
(b) All petitions filedunder this section wherein an order is sought for the sale, lease or mortgageof real property, or of both real and personal property, shall be filed in theoffice of the clerk of the superior court of the county in which all or anypart of the real property is situated. If the order sought is for sale, leaseor mortgage of personal property, the petition may be filed in the office ofthe clerk of the superior court of the county in which any or all of suchpersonal estate is situated.
(c) All members of theclass in esse shall be parties to the proceeding, and where any of such membersare under legal disability, their duly appointed general guardians or theirguardians ad litem shall be made parties. The clerk of the superior court shallappoint a guardian ad litem to represent the interests of the possible membersof the class not in esse, and such guardian ad litem shall be a party to theproceeding.
(d) Upon a finding bythe clerk of the superior court that the interests of all members of the class,both those in esse and those not in esse, would be materially promoted by asale, lease or mortgage of any such property, he shall enter an order that thesale, lease or mortgage be made, and shall appoint a trustee to make suchsale, lease or mortgage, in such manner and on such terms as the clerk may findto be most advantageous to the interests of the members of the class, boththose in esse and those not in esse; but no sale, lease or mortgage shall bemade, or shall be valid, until approved and confirmed by the resident judge ofthe district, or the judge holding the courts of the district. As a conditionprecedent to receiving the proceeds of the sale, lease or mortgage, thetrustee shall be bonded in the same manner as a guardian for minors.
(e) In the event of asale of any such property, the proceeds of sale shall be owned in the identicalmanner as the property was owned immediately prior to the sale; provided,
(1) The trusteeappointed by the clerk as provided above may hold, manage, invest and reinvestsaid proceeds for the benefit of all members of the class, both those in esseand those not in esse, until the occurrence of the event which will finallydetermine the identity of all members of the class; all such investments andreinvestments shall be made in accordance with the laws of North Carolinarelating to the investment of funds held by guardians or minors; and all theprovisions of G.S. 36‑4, relating to the reduction in bonds of guardiansor trustees upon investment in certain registered securities and the deposit ofthe securities with the clerk of the superior court, shall be applicable to thetrustee appointed hereunder;
(2) The clerk byappropriate order, in lieu of holding, managing, investing and reinvesting theproceeds of sale, may pay or authorize the trustee to pay the entire amount ofsuch proceeds to the living members of the class as they may be thenconstituted or to their duly appointed guardians, or to pay the ratable portionor portions of such proceeds to one or more of such living members or to theirguardians; provided that, where the class would be closed by the death of themother or mothers of the members of the class, said mother or mothers areliving and have attained the age of 55, and upon the further condition thatthere be first filed with the clerk a bond conditioned upon the payment of thelawful share of any member of the class not then in esse, but who maythereafter come into being or otherwise become a member of the class, to suchmember or his guardian whenever he becomes a living member of the class. Suchbond shall be payable to the State to the use of the additional members of theclass and shall be either a cash bond or a premium bond executed by a suretycompany authorized to transact business in North Carolina. The penalty of suchbond shall not be less than one and one fourth the amount of the proceeds ofsale. Any bond filed hereunder shall be acknowledged before and approved by theclerk of the superior court.
(f) In the event theproceeds of sale shall be paid over to a trustee and invested by him asauthorized above, the entire income actually received by the trustee from suchinvestment shall be paid by said trustee periodically, and not less often thanannually, in equal shares to the living members of the class as they shall beconstituted at the time of each such payment, or to the duly appointedguardians of any such living members under legal disability.
(g) In the event thecourt orders a lease of the property, the proceeds from the lease shall befirst used to defray the expenses, if any, of the upkeep and maintenance ofthe property, and the discharge of taxes, liens, charges and encumbrancesthereon, and any remaining proceeds shall be paid over by the trustee in theirentirety, not less often than annually, in equal shares to the living membersof the class as they shall be constituted at the time of each such payment orto the duly appointed guardians of any such members under legal disability.
(h) Payments of incometo the living members of the class as aforesaid shall constitute a full andfinal acquittance and disposition of the income so paid, it being the intent ofthis section that only the living members of the class (as they may beconstituted at the time of each respective income payment) shall be entitled tothe income which is the subject of the respective payment, and that possiblemembers of the class not in esse shall not share in, or become entitled to thebenefit of any income payment made prior to the time that such members are bornand become living members of the class.
(i) In the event thatthere has been a sale of any of the property, and the proceeds of sale arebeing held, managed, invested and reinvested by a trustee as provided above,any member of the class who is of legal age and who is not otherwise underlegal disability may sell, assign and transfer his entire right, title andinterest (both as to principal and income) in the funds or investments so heldby the trustee. Upon receiving written notice of such sale, assignment ortransfer, the trustee shall recognize the purchaser, assignee and transferee asthe lawful successor in all respects whatsoever to the right, title andinterest (both as to principal and income) of the seller, assignor andtransferor; but no such sale, transfer or assignment shall divest the trusteeof his legal title in, or possession of, said funds or investments or (exceptas provided above) affect his administration of the trusts for which he wasappointed.
(j) The court shallorder a mortgage of the property only for one or more of the followingpurposes:
(1) To provide funds forthe costs and expenses of court incurred in carrying out any of the provisionsof this section;
(2) To provide funds forthe necessary upkeep and maintenance of the property;
(3) To make reasonableimprovements to the property;
(4) To pay off taxes,other existing liens, charges and encumbrances on the property.
(k) The mortgagee shallnot be held responsible for the application of the funds secured or derivedfrom the mortgage. As used in this section, references to mortgages shall alsoapply to deeds of trust executed for loan security purposes.
(l) Every trusteeappointed pursuant to the provisions of this section shall file with the clerkof the superior court an inventory and annual accounts in the same manner as isnow provided by law with respect to guardians.
(m) The superior courtshall allow commissions to the trustee for his time and trouble in theeffectuation of a sale, lease or mortgage, and in the investment and managementof the proceeds, in the same manner and under the same rules and restrictionsas allowances are made to executors, administrators, and collectors.
(n) Provided, however,this section shall not be applicable where the instrument creating the gift,devise, bequest, transfer or conveyance specifically directs, by means of thecreation of a trust or otherwise, the manner in which the property shall beused or disposed of, or contains specific limitations, conditions orrestrictions as to the use, form, investment, leasing, mortgage, or otherdisposition of the property.
(o) And providedfurther, this section shall not alter or affect in any way laws or legalprinciples heretofore, now, or hereafter existing relating to the determinationof the nature, extent or vesting of estates or property interests, and of thepersons entitled thereto. But where, under the laws and legal principlesexisting without regard to this section, a gift, devise, bequest, transfer orconveyance has the legal effect of being made to all members of a class, someof whom are in esse and some of whom are in posse, the procedures authorizedhereby may be utilized for the purpose of promoting the best interests of allmembers of the class, and this section shall be liberally construed toeffectuate this intent. The remedies and procedures herein specified shall notbe exclusive, but shall be cumulative, in addition to, and without prejudiceto, all other remedies and procedures, if any, which now exist or hereafter mayexist either by virtue of statute, or by virtue of the inherent powers of anycourt of competent jurisdiction, or otherwise.
(p) The provisions ofthis section shall apply to gifts, devises, bequests, transfers, andconveyances made both before and after April 5, 1949. (1949,c. 811, s. 1; 1971, c. 641, s. 1; 1997‑456, s. 27.)
